Saturday, February 27, 2016

Buffett: Climate change hysteria is a loser

Marginal Revolution: "How Berkshire Hathaway thinks about climate change." From the report: "As a citizen, you may understandably find climate change keeping you up nights. As a homeowner in a low-lying area, you may wish to consider moving. But when you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries."

19 comments:

Anonymous
said...

Tell it to those squishy tree-huggers at ExxonMobil.

http://graphics.latimes.com/exxon-arctic/

Back in 1990, as the debate over climate change was heating up, a dissident shareholder petitioned the board of Exxon, one of the world’s largest oil companies, imploring it to develop a plan to reduce carbon dioxide emissions from its production plants and facilities.

The board’s response: Exxon had studied the science of global warming and concluded it was too murky to warrant action. The company’s “examination of the issue supports the conclusions that the facts today and the projection of future effects are very unclear.”

Yet in the far northern regions of Canada’s Arctic frontier, researchers and engineers at Exxon and Imperial Oil were quietly incorporating climate change projections into the company’s planning and closely studying how to adapt the company’s Arctic operations to a warming planet.

Ken Croasdale, senior ice researcher for Exxon’s Canadian subsidiary, was leading a Calgary-based team of researchers and engineers that was trying to determine how global warming could affect Exxon’s Arctic operations and its bottom line.

“Certainly any major development with a life span of say 30-40 years will need to assess the impacts of potential global warming,” Croasdale told an engineering conference in 1991. “This is particularly true of Arctic and offshore projects in Canada, where warming will clearly affect sea ice, icebergs, permafrost and sea levels.”

The good news for Exxon, he told an audience of academics and government researchers in 1992, was that “potential global warming can only help lower exploration and development costs” in the Beaufort Sea.

But, he added, it also posed hazards, including higher sea levels and bigger waves, which could damage the company’s existing and future coastal and offshore infrastructure, including drilling platforms, artificial islands, processing plants and pump stations. And a thawing earth could be troublesome for those facilities as well as pipelines.

As Croasdale’s team was closely studying the impact of climate change on the company’s operations, Exxon and its worldwide affiliates were crafting a public policy position that sought to downplay the certainty of global warming.

The gulf between Exxon’s internal and external approach to climate change from the 1980s through the early 2000s was evident in a review of hundreds of internal documents, decades of peer-reviewed published material and dozens of interviews conducted by Columbia University’s Energy & Environmental Reporting Project and the Los Angeles Times.

You may have heard a lot about Zimbabwe in the media in recent years, yet an often unreported side of life here is the changes that are taking place in our climate.

Did you know that in the last twenty years, we have been hit with the extremes of weather? And that since 1987, my country has experienced the six warmest years on record?

We have had to deal with ten droughts during this time, leaving us with less freshwater and destroyed biodiversity. Our agricultural zones have now also shifted. Yet while some communities have struggled to cope with a dry and sparse landscape, others have faced the exact opposite as devastating floods persistently hit the lower Guruve.

These events have revealed just how vulnerable parts of Zimbabwe are to weather events and the high price we have to pay.

Let me explain: Any changes to the climate exacerbate Zimbabwe's problems with poverty. When the impacts of climate change hit those living in poverty, it starts a dangerous cycle. Disasters can strip people of their basic needs for survival and all changes in climate can undermine any progress we make in reducing poverty.Many people rely on the climate to provide the conditions for water and food supply, essential factors for maintaining health and creating opportunities for economic growth.

Yet these are now at risk; climate predictions for our country show that the situation is likely to continue and even get worse.

For people already balancing precariously on the poverty line this means a decrease in maize, the country's staple food, along with a loss in livestock production as it becomes difficult to find areas for grazing. Water is likely to become a problem in two respects; with fewer rain days there will be greater stress on our supplies as the water table lowers, but when the rains do occur they will continue to happen with greater intensity, increasing the risk of floods and other natural disasters.

Zimbabwe must prepare for what threatens to one of the most serious food security challenges of the 21st century. Practical Action is working with groups of farmers living in Zimbabwe's most vulnerable regions to protect water and food supplies.

The starting point for protecting ecosystems is the farmers' local knowledge. In order to deal with the new challenges of climate change, this needs to be combined with emerging agricultural innovations.

The 'Learning Centre' developed by Practical Action is a place for this, creating an interactive forum for raising awareness, and promoting techniques that help adaptation at the farm-level.

The learning centre helps share information about good techniques widely, yet it would struggle to reach all farmers. And, as I mentioned earlier, the impacts of climate change go wider than the farming sector, threatening most people living in vulnerable areas; we now need investment to support and scale up adaptation projects that include strengthening of early warning systems, disaster preparedness, water harvesting and many others.

The people of Zimbabwe need a climate deal to be agreed in Copenhagen - a deal which can limit the effects of climate change we will experience, while providing support for Zimbabwe to implement its adaptation plans.

Now the industrialised countries have the chance to correct climate injustice. Are the leaders of these countries prepared to take seriously the concerns of people in developing countries and tackle climate change? Zimbabwe has many challenges for the future, but climate change should not be one that we are unprepared for.

"How Berkshire Hathaway thinks about climate change" is less compelling than "How ExxonMobil thinks, and acts, about climate change." I know which way I'm betting.

The Berkshire Hathaway thinking on display in that link is specifically about its exposure to insurance liability in the next 12 months, whereas ExxonMobil's is about its entire business model.

Marginal Revolution, whatever that is, chose not to include Berkshire Hathaway's opening sentence: "It seems highly likely to me that climate change poses a major problem for the planet." Unfortunately for the deniers, Berkshire Hathaway is not joining the Watts Up With That circle jerk. It's reassuring BH investors that the company's portfolio is annually recalculated to absorb all future losses due to climate change. In fact, Berkshire Hathaway explicitly says that it is prepared for those climate change claims to come, and that it expects to profit from them.

Oh snap, you said Solyndra! (Benghazi! Halliburton! Potatoe!) What Solyndra has to do with Berkshire Hathaway's or ExxonMobil's literal behavior to protect their stockholders from the increasing costs of increasing climate change, I have no idea, but nevertheless EPIC CRUSH, DUDE!

It’s true, Solyndra ate our money and is now defunct. The speed of its collapse shows just how a bad investment it was. So stipulated. When are you going to put up another new post about the failure of the Tesla? And we are typing this to each other in Morse Code on an electric signal wire, right?

Exxon's experts recently told the Washington Post that there will be "catastrophic" rises in average temperatures unless there is government action. Shell Oil has stated the same. Congratulations, you're to the right of the global petrocorporations on climate change. Fortunately for the world, those still clinging to that position in 2016 are a lot like the cliched sad polar bear on the shrinking ice floe.

Berkshire Hathaway explicitly says that it is prepared for those climate change claims to come, and that it expects to profit from them.

I can't think of anyone who would be better positioned to profit from the massive monetary losses caused by super snowstorms (oh wait, no, it's "the end of snow," right?), massive hurricanes (oh wait, no, we haven't been able to buy a hurricane hit here for over a decade), wilting summers (oh wait, no, the summers were much more stifling in the 1930's), and rising sea levels (oh wait, no, sea levels are just doing the same thing they've been doing since the last ice age - only much more slowly), than an insurance company. Come to think of it, I think they'll do alright after all!

Exxon's experts recently told the Washington Post that there will be "catastrophic" rises in average temperatures unless there is government action. Shell Oil has stated the same.

If I was an "expert" at the one industry most likely to receive the iron fist of government so that politicians can tell their constituencies that they're "doing something" about global warming, I'd dutifully say all the "right things" too. Or are you claiming that the oil industry's geologic scientists are now as qualified as climate scientists to make announcements about the future climate? Come to think of it, so's an insurance guy!

I was waiting for the Tesla "counterpoint". This company - such as it is - is entirely subsidized by the American taxpayer: http://dailycaller.com/2015/08/10/tesla-is-hemorrhaging-money-despite-millions-in-govt-subsidies/

But, congratulations, you believe the public pronouncements of Exxon and Shell that they really believe in this climate change nonsense. They say this because they believe it, fer shur, and not because it's a cheap way to buy some left-wing goodwill.

The Tesla company - such as it is - now offers "the best-selling luxury sedan in America. By a lot." (Fortune Magazine) The waiting list - such as it is - for Tesla's forthcoming SUV model is over 25,000. The people pricing the company's stock don't seem to be big Daily Caller readers. Doooomed.

Exxon and Shell are lying, but only lately. For unvarnished, uncompromised truth, you have to go to... the Daily Caller. Okey-dokey. Skepticism is a great tool, but you don't want to overuse it.

Thus, what Exxon and Shell and other companies are now saying is grade-A baloney. And so are the matching things their experts have told them internally for well over a decade. And so is having spent that time using climate change models to adjust their actual infrastructure in the outside world. They (and Mobil, and Conoco) raised North Sea gas platforms to account for expected sea levels, and strengthened Atlantic pipelines against climate change, and redesigned helipads, and built roads in previously unusable areas. Was that also to get some good, cheap leftwing P.R.?

Strangely, the companies were also publicly denying and loudly denouncing climate change concerns at the exact same time they were altering their infrastructure. But after all, nobody wants too much goodwill.

[Exxon and Shell] experts have told them [global warmy-type] things internally for well over a decade.

There you are beating the drum for those all-knowing oil company "experts" again. So I guess the answer to the question of whether petroleum engineers are able to tell climate scientists what it's all about, is clear.

Nevertheless, your breathless account of these brave souls (whose lives are dedicated to increasing the amount of carbon belched into earth's atmosphere), and their heroics (now decades old) in preparing for the effects of global warming is a little hagiographic.

“During planning and construction of major engineering and infrastructure projects, it is standard practice to take into account many types of risks both short-term and long-term, likely and unlikely,”said Alan Jeffers, a spokesman for Exxon Mobil...

[25 years ago,] A rash of storms and monster waves that had battered the North Atlantic and Gulf of Mexico during those years was particularly concerning, and engineers wondered whether climate change might be behind it...

“The tipoff to there being changes came from hurricanes,” said Bob Bea, another Shell offshore engineer...“Even back in those days ... hurricane intensities were changing.”

They concluded that although climate change was a “most uncertain parameter,” their pipeline designs should include protections against its impact...

“It was a hot topic in the early 1990s.”

Yeah, it was a hot topic, before the fraudulence in the global warming science community itself became evident.

I especially liked the quote about how intense hurricane activity clued them into the fact that this global warming stuff just might be serious and they'd better get crackin'. Do you think those offshore engineers would have guessed that 25 years later in 2016 we would have gone over a decade without a major hurricane coming ashore in the U.S? They should have been polishing up their climate crystal balls.

Also, I know it's hard to follow a link but the Daily Caller links to Reuters and the LA Times story about how even after $5 billion in subsidies, Tesla still loses $4000 on every car built. What a solid business model. But then:

"Tesla owners have an average household income of about $320,000, according to Strategic Visions, an auto industry research firm."

Sad little polar bear. 1,500 words in that LA Times article, and you couldn’t even find a twelfth to boldface.

“...25 years later in 2016 we would have gone over a decade without a major hurricane coming ashore in the U.S.”

Love it. Are you sure you don’t want any MORE qualifiers in your expert criteria? The first fifteen years, they didn’t count. Nova Scotia hurricanes also don’t count. The big increase in Arctic cyclones doesn’t count, obviously. Cyclones? Hurricane Sandy didn’t technically come ashore as a hurricane, so that little drizzle is disqualified. And Exxon’s corporate responses to climate change, they don’t count the most of all.